Tencent plans offer for Korean gaming company Nexon, parent company

Chinese game titan Tencent Holdings Ltd is considering an offer for the holding company that controls South Korean gaming company Nexon, two informed sources told Reuters.

Tencent seeks to recruit co-investors, the sources said. One source also said that private equity firms are studying options for an agreement, including taking the privately held company listed on the stock exchange.

Nexon's founder, Kim Jung-ju, plans to sell a 98.64 percent controlling stake in its own-owned Nexon holding company and related parties, including his wife, the Korea Economic Daily reported. .

The stake is worth between 8,000 and 10 trillion won ($ 7.1 billion to $ 8.9 billion), according to reports from the Korea Economic Daily and the Maeil Business Newspaper.

Deutsche Bank and Morgan Stanley are holding the sale, sources told Reuters. Both banks declined to comment.

The economic newspaper Maeil said Tencent chose Goldman Sachs as an advisor, citing unidentified sources. He added that other potential bidders include KKR & Co Inc., TPG Capital, Carlyle Group and MBK Partners.

NXC and Tencent refused to comment.

Founded in 1994, Nexon has developed more than 80 live games in more than 190 countries, including IP franchise successes such as MapleStory, Dungeon & Fighter, Sudden Attack and KartRider.

Tencent, the largest gaming company in the world in terms of turnover, holds the exclusive license to operate Dungeon & Fighter in China.

The social media firm specializing in payments and its counterparts in the game have faced a crackdown by the Chinese authorities, who have stopped approving new titles from March, as part of the deal. 39, a regulatory reform provoked by growing criticism that video games are violent and cause myopia among young users.

The frost was lifted in December, when Tencent had already lost billions in its market value.

Reuters